Vietnam Puts 2 More Weak Banks on Blacklist

Tuan Minh

11:51 04/01/2017

BizLIVE - The Vietnamese banking regulator has identified two more ailing banks that need special treatment.

Vietnam Puts 2 More Weak Banks on Blacklist

Sacombank and Dong A Bank will undergo special treatment by the central bank this year.

The State Bank of Vietnam (SBV), the country’s banking authority, has listed five weak banks that need special handling this year as the government seeks to speed up the banking reform.
Dong A Bank and Sacombank, both headquartered in Ho Chi Minh City, have been put on the blacklist, adding to three banks namely Vietnam Construction Bank, OceanBank and GP.Bank, which were acquired by SBV at zero cost in 2014.
SBV has submitted to the Politburo proposals to tackle shortcomings of the five banks, said Nguyen Van Hung, SBV’s deputy chief inspector, at a press meeting on January 4.
“Although these five banks have seen improvements in their health, especially liquidity, they are still vulnerable to risks. They will undergo treatment in early 2017 as soon as the Prime Minister gives the green light,” Hung added.
The central bank has also taken a hardline stance on ailing non-banking financial institutions and popular credit funds, the official said.
Deputy Prime Minister Vuong Dinh Hue at a parliament sitting late in October last year tipped that the government would pilot allowing weak banks to file for bankruptcy.
Meanwhile, PM Nguyen Xuan Phuc said at a meeting between the government and international donors last month that the Asian Development Bank (ADB) and a Vietnamese private partner were working on a plan to acquire an ailing domestic bank.
Shares of Sacombank (STB) fell 3.9% to 8,450 dong ($0.37) each at break time on Wednesday after closing down 7% on Tuesday.